Covid-19 update: G20 readies $5 trillion war chest to combat coronavirus

The G20 states on Thursday said they would inject more than $5 trillion into the global economy to counter the social and economic impact of the Covid-19 pandemic and to safeguard jobs and revive growth.

Prime Minister Narendra Modi, who joined an extraordinary virtual G20 leaders’ summit, said the pandemic offered an opportunity to forge a new concept of globalisation that wasn’t focused solely on an economic agenda. He also called for the reform of the WHO, which was based on “last century’s models”, according to people familiar with developments.

The summit, convened by G20 president Saudi Arabia following a suggestion from Modi, marked the first time the grouping’s leaders met via video conference and discussed issues that were not focussed on economy and finance.

A communique issued after the meeting said the G20 will work with the World Health Organization (WHO), International Monetary Fund (IMF), World Bank and the United Nations to protect lives, safeguard jobs, preserve financial stability and revive growth, minimise disruptions to trade and global supply chains and provide aid to all countries.

“We are injecting over $5 trillion into the global economy, as part of targeted fiscal policy, economic measures, and guarantee schemes to counteract the social, economic and financial impacts of the pandemic,” the G20 said.

The grouping comprising 19 of the world’s largest economies and the European Union will also undertake “immediate and vigorous measures to support our economies; protect workers, businesses – especially micro-, small and medium-sized enterprises – and the sectors most affected”.

The people cited above, who spoke on condition of anonymity, said Modi, during his statement and interventions at the summit, said the G20 had focused on a purely economic agenda to define globalisation after mitigating the effects of the 2008 financial crisis.

However, this form of globalisation had failed the world order as multilateral forums became platforms to balance competing interests instead of taking up collective interests in areas such as terrorism and climate change, Modi said, according to the people.

The Covid-19 pandemic offers an opportunity for G20 and the international community to look at a new concept of globalisation that focuses on the collective well-being of mankind and collective interests in spheres such as counter-terror or climate change and future pandemics, Modi told the summit.

Modi called for strengthening and reforming inter-governmental organisations such as WHO, which continue to be based on the last century’s model and haven’t adapted to deal with new challenges, the people said.

He also called for new crisis management protocols and procedures for an inter-connected global village and joint efforts to reduce the economic hardships caused by the pandemic, especially for the economically vulnerable, the people said. There should also be open sharing of the benefits of medical research and development of adaptive, responsive and affordable healthcare systems and resources that can be deployed worldwide.

“In a sense, the prime minister spoke for the small, emerging and developing nations that were without a voice at this forum and this approach represented a continuity of our domestic policy,” said a person who declined to be named.

Modi pointed out that 90% of the Covid-19 infections and 88% of deaths were in G20 countries, which account for 80% of the world’s GDP and 60% of the global population. He called on the G20 to frame a concrete action plan to fight the pandemic.

It was noted that the world community was still trying to forge a coordinated response three months after the crisis began, though the virtual summit had shown that the world community could come together, the people said.

The G20 summit was held against the backdrop of the failure of the UN Security Council, currently led by China, to call a single meeting focused on the pandemic. The WHO too has faced some criticism for not acting more decisively on the crisis.

The G20 communique said the unprecedented pandemic was a “powerful reminder of our interconnectedness and vulnerabilities” and combating the virus would require a “transparent, robust, coordinated, large-scale and science-based global response”.

“We will share timely and transparent information; exchange epidemiological and clinical data; share materials necessary for research and development; and strengthen health systems globally, including through supporting the full implementation of the WHO International Health Regulations (IHR 2005),” it said.

The people cited above said the discussions were held in a cooperative spirit and there was no reference to the origin of the virus – a reference to efforts by countries such as the US to label Covid-19 as the “Wuhan virus”.

“The WHO’s mandate is fairly limited to handle issues that would let it be at the forefront of dealing with such pandemics. There is a need to empower it so that it can take the lead, and to boost its capacity to provide early warnings, help states develop protocols and to forge common solutions to future crises,” said a person.

The people said further discussions of the G20 members were underway to frame an “action paper” with specific steps to be taken to counter the pandemic and its fallout.